Bank of Communications Ltd., the nation's fourth largest by value, is in negotiations to acquire stakes in U.S. and European financial companies, Chairman Jiang Chaoliang said.

The meltdown in U.S. subprime loans provides a ``good buying opportunity'' as valuations become attractive, Jiang told reporters at a press conference in Beijing today.

Chinese banks have expressed interest in takeover targets abroad as banks globally posted $188 billion in subprime-related losses and U.S. financial shares dropped to their lowest level since May 2003. China's banks have cash to spend after selling $74 billion of shares since June 2005.

Shanghai-based Bank of Communications also may add one or two branches abroad this year as it seeks to rely less on domestic operations, Jiang said today. Government measures to slow growth in the Chinese economy, such as lending curbs, will cut the bank's amount of ``high-yielding'' assets, he said.

Profit jumped more than 60 percent in 2007 on higher income from lending and more revenue from fee-based services including distributing mutual funds and credit cards, the company known as BoCom said in January.

HSBC Holdings Plc, Europe's largest bank by market value, owns 19 percent of BoCom. It has an option, taking effect in August, to lift its stake to 40 percent should Chinese rules permit. A single foreign investor currently isn't allowed to own more than 20 percent of a Chinese financial institution.

``Whether HSBC will raise the stake further depends on the change of Chinese rules as well as HSBC's willingness,'' Jiang said today.

The China Banking Regulatory Commission is reviewing rules on foreign ownership of Chinese lenders, the watchdog's Chairman Liu Mingkang said last week.